Cruise lines focus on luxury

Before
the financial crisis changed everything, the pricing strategy at Silversea was
along these lines: “If you have to ask how much it costs, you can’t afford
it.”

But
now the luxury cruise operator, controlled by the Lefebvre family of Italy, is
pitching “value” to its customers, in the vein of Wal-Mart and Macy’s.

“We’re
really providing a great deal of value today, more so than in the past,” said
Kenneth W. Watson, chief operating officer of Monaco-based Silversea, whose U.S. headquarters is in Fort Lauderdale.

That
means as much as 60 percent off brochure rates — including airfare.

“The
luxury market saw the most significant impact” from the economic downturn,
said Stewart Chiron, a Miami-based cruise expert who runs cruiseguy.com.
“That’s where there has been the most significant level of pricing drop.”

Even
its newest vessel, the Silver Spirit, which debuted at Port Everglades in
January, has deep discounts available on many voyages. For instance, for a
7-day cruise departing June 5 from Venice to Athens, suites started at
$4,550, including airfare.

The
new 36,000-ton ship, built by Fincantieri, is Silversea’s largest ever,
carrying 540 passengers. But the fancy ship, which has Art Deco overtones, is
only 10 percent of the 5,400-passenger capacity of Royal Caribbean International’s
Oasis of the Seas, the world’s largest cruise ship.

Other
luxury lines — the Yachts of Seabourn, Regent Seven Seas Cruises and Crystal
Cruises — also have been resorting to big price cuts and specials to fill
their ships for well over a year.

The
top end of the industry is facing a double-barreled challenge of a weak global
economy and a sudden spurt in fancy cruise capacity. And cruise cabins — like
airplane seats and hotel rooms — are better off filled at discounts than not
at all.

In
June 2009, the Yachts of Seabourn introduced the 32,000-ton Seabourn Odyssey,
the first new luxury ship to hit the market in six years. Silversea hasn’t yet
decided on an option to order a sister ship to the Silver Spirit. But Seabourn,
which is part of the Carnival Corp. umbrella of cruise brands, is introducing a
second new ship, the Seabourn Sojourn in June 2010, and a third in 2011.

That’s
a lot of luxury cabins to fill — particularly since mainstream cruise
operators such as Celebrity Cruises and Norwegian Cruise Line are ratcheting up
the competition by carving out elite sections on their newest, largest ships to
cater to premium-paying VIP customers. The luxury digs are walled off from the
main ship and provide many of the amenities of a luxury cruise vessel.

With
its clientele suddenly focused on more careful spending, Silversea has been touting
“value” by emphasizing that its prices include more than those at mainstream lines:
Drinks and tips, for instance, are included. “You’re not going to get sticker
shock on our ships,” said Brad Ball, a Silversea’s spokesman.

Silversea
said its price cuts are playing well with travelers: By December 2009, the company
had booked 70 percent of its planned revenues for 2010. “If you want to book
early, you get the best price,” Watson said. “As we fill our ships, we raise
our prices.”

To
be sure, the heaviest discounting is behind the industry, and ticket prices are
expected to rise as the economy continues to recover. That means the bargains
probably won’t get any better than they are right now.

Comments are closed.